Chart Talk {04.28.17}

Today's chart is from the good folks over at Chart of the Day.  You can link to their main page here. {Subscription Required}.  Below is their commentary:

"{On Wednesday}, the Nasdaq topped 6000 for the first time. For some perspective on the tech-laden Nasdaq Composite, today's chart presents the overall trend of the Nasdaq since 2000. As today's chart illustrates, the Nasdaq's seven-year post-financial crisis rally is still very much intact. In fact, even with today's milestone record high, the Nasdaq is not yet trading near resistance."

*Long ETFs related to the Nasdaq in both client and personal accounts although positions can change at any time without notice here or via any other form of media, including but not limited to print or electronic.

Back Tuesday.

Stock Returns Are Narrowly Represented Amongst A Small Group Of Names

An interesting point brought up by Eddy Elfenbein over at his blog "Crossing Wall Street" on the "Skewedness of Stock Returns".   Elfenbein in commenting on a recent paper "Do Stocks Outperform Treasury Bills," notes the following:

"When we say that the market returns, say, 10% per year, that’s superficially correct. But.....the large majority of stocks don’t do much of anything, and a tiny portion of homerun stocks make up for the entire gain. The numbers are pretty extraordinary.

{When looking at monthly periods the average stock gained 1.13% compared with the one-month T-bill rate of 0.38%.  But that average is very misleading since most stocks didn’t make money for that month, and even more lost to the T-bill. Although, when we weight its market size, the results get a little better.

After a decade, the “skew” is even more pronounced. The average stock gains 118% while the median stock gains just 14%. Only 37% of individual stocks out perform the market after a decade. Over the course of their lifetime, just 42% of stocks beat the one-month T-bill.

When we talk about total dollars made, just 0.33% of stocks make up for half of the wealth created by the stock market. Less than 4% accounts for the entire market’s gain. The other 96% combined match Treasury bills."

These results makes sense to me after 30 plus years investing in the markets.  When I started out and we built portfolios out of individual stocks, the rule of thumb was that in a diversified stock portfolio  on average over the course of a year about half the names would perform in line with the market.  Of those remaining, half had the potential to appreciate at some rate usually double that of the market and the other half had the potential to decline at some rate usually double that of the market.  Where you proved your worth, the theory went, was in your intuitive ability to cut your losers and let your winners run.  We know how good at that most managers are and were since most active managers routinely underperform the market.

I think the problem that active managers face today is that the data is suggestive that a small percentage of stocks outperform markets for any great period of time and there are likely not enough of these stocks to buttress a portfolio against the inevitable losses from names that disappoint.  Stocks that report bad news can lose 5-10% of their value or even more almost immediately as the news is posted.  There is usually little opportunity to avoid these in an era where all material news is mandated by law to be reported at the same time to everybody.

Markets tend to be very unforgiving to companies that disappoint.  Sometimes this can be seen in a stock as you will watch it trend lower over a period of time before the bad news comes out.  Too often though the news is random and out of the blue.  A drug in trials disappoints, a natural disaster takes out a company's facilities, bad weather, fickleness of consumers, unexpected competition and a whole host of other things can affect individual stock names unexpectedly and there is very little an active manager can do to counter their effects.

Just chalk it up to another reason why active managers are behind the eight ball in today's markets.

Thoughts {04.26.17}

China just launched its first domestically built aircraft carrier.-Business Insider.

We're starting to see some of of President Trump's tax plan.  A 15% corporate rate and a 10% tax on repatriated corporate earnings abroad are the main highlight.  Markets are flat ahead of this news but then they have also just seen a monster rally in the past two days so maybe that's not so surprising.  Regarding overall tax reform go read Ben Carlson over at Bloomberg View, "How Markets Respond to Tax Reform".

And speaking of that two day rally, it caught a lot of people by surprise.  Maybe it shouldn't have.  Markets were short-term oversold courtesy of the French election worries.  When that didn't pan out folks jumped back in the pool.  Markets have a bit of momentum right now but have also again in the shortest time frames we measure moved back to overbought status.

According to the Almanac Trader, "May is historically a solid month in post-election years".

Pope Francis just gave a TED speech.  Here's TED's brief description on what he said:

"A single individual is enough for hope to exist, and that individual can be you, says His Holiness Pope Francis in this searing TED Talk delivered directly from Vatican City. In a hopeful message to people of all faiths, to those who have power as well as those who don't, the spiritual leader provides illuminating commentary on the world as we currently find it and calls for equality, solidarity and tenderness to prevail. "Let us help each other, all together, to remember that the 'other' is not a statistic, or a number," he says. 'We all need each other.'"

Thoughts {04.25.17}

The market was up big yesterday.  A combination of relief over the French elections and better than expected earnings here in the US.  Earnings continue to come in nicely for the first quarter and economic growth seems to be expanding.  If both of these continue then it is possible that earnings estimates will be going up.  That would make the stock market look a bit less expensive.  That is unless we just rally through the numbers.  I mean if earnings go up another 3-5% but stocks go up by 10% then all you've done is make stocks maybe even more expensive, jus ton higher estimates.

US economic and job growth is impressive given the stealth depression we are seeing in retail.  Companies like Amazon* are killing the retail business as we know it.  Nearly 90,000 retail jobs have been lost since last October.  Expect more of this as Americans increasingly prefer to buy goods off their computers or phones than going to the mall.  

Then again people seem to prefer experiences to things these days.  That trip to the ball game or the vineyard seems more in tune with modern thinking on how to spend discretionary income than buying that 3rd pair of designer jeans.

If you have a retirement plan go read over at the Wall Street Journal's blog "Grab Your Pitchforks, America, Your 401{K} May Need Defending From Congress".   The article refers to considerations in Congress to tax contributions to 401{k} plans, effectively eliminating some of the main benefits of using them.  Look I think this will be a political non-starter.  In a country where the average American has not anything like the amount of money saved to have some sort of retirement it is hard for me to fathom that we'ed implement policies that further reduce incentives for us to save money for the day when we say goodbye to our jobs.  Yet, you should know I was at a meeting with some very smart accountants  right after President Trump took office and they were talking even then about this possibility so expect to see more on this subject as tax reform takes shape.  {WSJ article is behind a paywall but you can probably find it or links to it somewhere on the web if you look.}

*Amazon is a component of several ETFs we own for clients and in personal accounts.

Valuation {04.24.17}

The S&P 500 closed yesterday at 2,348.70 which is a gain of around 4.9%  for the year without factoring in dividends. This represents a gain of 2.20% from a market close of 2,298.30 from when we  last reviewed these numbers back on January 25, 2017.  Below is our current valuation analysis.  We are still using a current earnings range of $130-133 with a mid-point of $131.50 on the S&P 500 for 2017.  We will work on revising these numbers as we get a clearer picture of 1st quarter earnings results.  We also use a simple color code to give you some reference for these numbers.  Green will indicate that the valuation on the index on a strictly historical basis has become more attractive from the last time we did this review.  Red will indicate the opposite.  Black means unchanged.

Our Midpoint S&P 500 Earnings Estimate of $131.50. {Year End 2017}

Current PE:                     17.86% {PE has advanced from previous review of 17.33}
Earnings Yield:                 5.59% {down from previous review of 5.76%}
Dividend Yield:                1.90% {Estimated and down from previous of 2.06%}

Current Expected Price Cone of Probability {COP}:   1,950-2,500. {Unchanged} 

Rolling Four Quarter Estimate for the S&P 500, Our Estimate $135.05:

Current PE:                     17.39% 

Earnings Yield:                 5.74% 
Dividend Yield:                2.06% {Estimated}

The current yield on the 10 year US Treasury is 2.23%.  That is a decrease of 27 basis points since the last time we did this review.    

The Cone of Probability {COP} is our current assessment of the trading range within which we think stocks have the potential to trade during the described time period.  It is a probabilistic assessment based on a many factors.  Some of these inputs are: Earnings estimates, also are those estimates rising or falling, dividend yield, earnings yield and the current yield on the US 10 year treasury.  This is not an exhaustive list of all of the variables that are used in creating the cone.  The Cone of Probability is used solely for analytical purposes.  It will fluctuate with market conditions and changes to the data inputs.  Index prices can and have traded outside of the range of the cone.  The data supplied when we discuss the cone is for informational use only.  There should be no expectation that this price range will be accurate and there are no guarantees that this information is correct.

*Long ETFs related to the S&P 500 in client accounts, although positions can change at any time.

Chart Talk {04.20.17}

Here are two charts on the commodity oil as represented by West Texas Intermediate crude or WTI.  Charts are from Tradingview.com and you can double-click on these to make them larger if you would like.  Note that while I am do not own oil I own oil company related ETFs for clients and in personal accounts and would consider adding to these positions on any further weakness in crude.  Please note these positions can change at any time without notice here or by any other means of electronic or written transmission.  The first chart looks at what has recently happened to WTI.

This next one shows WTI when we step out a little in regards to time and look at crude on a longer term basis.

One thing to note on this 2nd chart is that you are likely going to get some resolution on the trend in oil in the coming months as either the bullish trendline dating back to early last year is going to be violated or oil is going to move through that long term resistance shown above in green.  All you really have to do is wait and see.  WTI is running out of room to trade in between.  Of course I have no idea on how it's going to resolve itself and I leave the guessing to you.

Back Monday.  

Thoughts {04.19.17-Cubs Edition}

Last night my wife and I went to see the Cubs play baseball.  The evening was surprisingly warm for mid-April so the game had a summer like quality to it.  One of the things that's great about my job is that I get to sit back, observe and try to figure out larger themes and longer term economic trends.  The languorous pace of a baseball game is great for that.  Here's what a garnered from heading out to the ballpark.

The economy based on Wrigley Field is doing just fine.  Now admittedly the folks at a baseball game are nowhere near a statistical sample of national economical growth.  In this town Cubs fans for the most part skew towards the young and upper middle-class  but over 39,000 people were feeling confident about their own finances to shell out at least $100 dollars {when you include all the costs of going to a game-tickets, food, beer, etc}.  People for the most part don't spend that kind of cash when they're worried about their jobs. I think we are better served by tuning out the debate on whether the economy is growing faster than expected or slower than what was forecast all the time.  As I've said before,  I think the economy is so changed from even ten years ago that most of the ways we measure it's health may be obsolete or inaccurate.  

I've said Cubs fans skew towards the young and upper middle-class but there were a sizable amount of fans of Hispanic descent sitting around us.  Now part of that may be that the Cubs have some recognizable Latin American names on the team but it seems to me that Hispanics like baseball perhaps more than statistics appreciate.  Cubs even piped in some Latin American tunes at times during the game breaks or when announcing players.

The crowd from what I could tell had a significant amount of people under the age of 40.  The place was packed with Millennials and their smartphones.  Some of these younger people spent more time on their phones than watching the game.  It is said that Millennials value experiences more than things and if that is true it was certainly on display last night.  As I said, I'm guessing the average amount spent last night at that ballgame was at least $100.  A team that just won the World Series doesn't exactly give its tickets away.  One way to think of this is that a younger person say netting $25,000-30,000 after taxes just spent somewhere around a full days wages going to that game last night.  If experiences are winning out over things then it may also help explain the ongoing meltdown in retail.  The $100 spent on the game isn't buying that extra pair of jeans or that new blouse.  

Oh and the Cubs won 9-7 and it only took three hours to play the game.  Baseball may have finally figured out how to move the game along.  Makes it much more enjoyable when it's not a slog.  Was even better that we didn't freeze!

Easter

Hill of Slane, Co. Meath, Ireland 2008

Christus Resurrectus Est! Vere Resurrectus Est!

Happy Easter!

Good Friday

Dingle Peninsula, Co, Kerry, Ireland.  2008.

Why I Am Leery Of Bond ETFs

Since the 2007-09 financial crisis investors have been on a relentless search for yield in a period where interest rates have declined to historically low levels.  What this has done has forced investors out along the yield curve in terms of duration.  That is investors have been forced to go farther out in time for any sort of meaningful yield.  Today the ten year US treasury bond yields 2.26%.~  The historic rate for that bond has probably been around 5% and you need to go back to the late 1940s and early 1950s to find a time when bonds yielded so little.   For that reason I have been and continue to be leery of bond ETFs.  The chart above from a website called "bps and pieces" shows how investors in search of yield have pushed both the duration out and the yield down on the Bloomberg Barclays US Aggregate Bond Index {AGG}.  According to the article, the duration today is 20% higher and the yield 20% lower than it was eight years ago.  While I have not analyzed other bond related ETFs, it is likely they have experienced the same circumstances as the AGG unless they are specifically mandated to keep their duration to a certain period of time, say under seven to ten years.  At some point as interest rates rise, these ETFs with longer durations are at risk because their prices in theory should decline as interest rates decline.  The reason for this is that the underlying value of their current bonds should decline to compete with the yields on higher rates.  For those of you new at this bond prices in general decline as yields rise and prices rise as yields decline.  I don't have time to go into all of this today.  Just trust me.  Historically that's how it works and has a high probability of working in the future.

ETFs the most at risk for a decline in the underlying value of the securities in their portfolios are those with holdings where the maturities are going to occur many years in the future.    If you own or are considering buying fixed income ETFs know what's in the underlying portfolios.  The math for ETFs also works for bond related mutual funds.

Now the other side of that equation is that as interest rates rise then ETFs or funds with shorter duration may start to look more attractive.  Just remember that it may be wise for you to keep your duration or time period short, perhaps under ten years.  Of course this is a general overview and should not be considered investment advice.  You need to understand your own unique financial considerations before acting on anything you read here or anyplace else.  I would suggest you talk to your financial advisor or do your own homework first before implementing any new fixed income strategy.  

Next week is tax week.  I expect to be busy the first part of the week helping clients with last minute issues related to their return.  As such I may not post until the middle of the week depending on my time requirements.  It is amazing to me how many things come over the transom just prior to the filing date. 

Link:  "Active Bond Funds:  An Evidence-Based Outlier?"

~Treasury information is from Bloomberg Markets.

*Long certain bond mutual funds and a few bond related ETFs in legacy accounts.

Chart Talk {04.12.17}

Today in response to a question we are showing a chart of the Nasdaq Composite.  Chart is from tradingview.com and you can double-click on it to make it larger if you would like.  The question that is not answered on the chart is what will be the resolution of the current trading range represented to the top and left of the chart.  Is this a topping action or a consolidation before the index powers forward to new highs?  Only time will tell.

*Long ETFs related to the Nasdaq Composite and the Nasdaq 100 in client and personal accounts although positions can change at any time without notice here or on any other form of electronic media.

Three Market Factors to Consider This Spring

Markets are known for their volatility, and the U.S. stock market is no different. In the past year alone, we’ve seen the S&P 500 gain 26% since bottoming out in February of 2016. In fact, 16% of that increase has occurred since the November 2016 presidential election. With this substantial growth, should we be worried about a market time-out? Here are a few things to consider when looking at the current state of the U.S. stock market:

1. Current Market Climate

There are many factors currently in play that could cause the market to head into a period where we consolidate our recent gains. For one, U.S. stocks are currently trading at around 18 times current estimates. This has stocks now trading on the expensive side when it comes to earnings. Now, stocks have seen periods with higher valuations and it can be argued that markets aren't as expensive as they seem in a low interest rate environment. However, we need to be aware that stocks are no longer as cheap as they were even a few months ago.

Secondly, if the economy stays strong and the promised tax reforms become a reality, corporate earnings could increase considerably. There has been plenty of talk about corporate tax reform and the repatriation of corporate earnings currently overseas. If these two things happen, the S&P 500 earnings could increase by an estimated 8%.

That being said, the market has been rallying for months based on many different optimistic scenarios including the two I listed above. The recent failed vote on health care illustrates that translating the new Administration's campaign promises into reality may be harder to achieve than many had hoped. This could cause investors to take more of a "wait and see" approach in the months ahead, at least until we see some clarity on the fortunes of economic and tax reform.

2. Optimism And The Market Future

Despite the impressive growth in the past year, stocks are currently overbought by our work and have been sluggish for most of March. According to CNBC, money flow into stocks has been strong all year,[1] which can sometimes be indicative of a market in need of a pause. Investors are optimistic about stocks right now. Perhaps a tad too optimistic in the short term. That is the opposite of what we saw last summer. Few were clamoring to buy equities back then when fear over the British exiting the European Union was at its highest. That turned out to be a pretty good place to be an investor. However, you had to shake off a lot of uncertainty back then and stocks ended up climbing the proverbial wall of worry for a very nice gain. It is possible that today's over exuberance is a signal that markets are a bit ahead of themselves. It is at a minimum something we'll continue to monitor going forward.

3. Seasonal Market Patterns

The third trend the market is facing is that of seasonal patterns, something we've discussed many times in the past.  We a're about to transition into the weakest time of year for stocks. Historically, stocks have faced a challenging time from April-September. Of course nothing guarantees we'll see this happen in 2017, but this pattern occurs often enough historically to give us something to be aware of in the coming months. 

What Does This Mean For You?

Of course I have no idea what the future will bring and I'd say that a period where stocks consolidate the gains of the last year or so would be in many ways healthy. It would dampen the speculative fever that has been quietly brewing and allow for earnings to catch up to the markets. Also while there are no guarantees, nothing seems to be indicative of the possibility a broader sell-off at this time beyond a typical correction. However, a historical correction would have the potential to take stock prices down anywhere from 5-15%. Being aware of such a possibility allows us to prepare different portfolio strategies or emotionally prepare clients against such an event and to also make any adjustments based on a client's risk reward parameters.  It is also possible that stocks will continue to move higher in the coming months. Bullish surges can last longer than investors think. Right now Wall Street is full of the tarnished reputations of those prognosticators who have claimed the end of this move higher. Finally I would note that stocks can also correct by time, as in going nowhere for a certain period, as well as price.

I don't want the take-away from this to be that I have become bearish of stocks. There are many reasons that I have discussed in the past why I am longer term positive on the markets and the economy. But there are longer and shorter term patterns to markets and we are always weighing the evidence when trying to discern market direction. Right now we are in the pay attention mode. Probability would indicate a higher likelihood of a struggling market or perhaps a slight correction but there is little real evidence of that yet. It is also possible that stocks will toddle along for a few days or weeks before finding their footing and continuing the bullish advance. But there is enough little subtle changes that make me think we should perhaps be ready in case we see a change in the market's dynamics. With this in mind, we can prepare ourselves emotionally and plan for different portfolio strategies in case we experience some rougher waters in the months ahead.

If you are concerned about your portfolio or have questions about how market trends will impact your long-term financial plan, call my office at 708.488.0115 or email us at lumencapital@hotmail.com. Our goal is always to ensure that your portfolio is aligned with your investment goals and risk level, regardless of what the market is doing.

About Chris

Christopher R. English is the President and founder of Lumen Capital Management, LLC-a Registered Investment Advisor regulated by the State of Illinois. A copy of our ADV Part II is available upon request. We manage portfolios for investors, developing customized portfolios that reflect a client’s unique risk/reward parameters. We also manage a private partnership currently closed to outside investors. Mr. English has over three decades of experience working with individuals, families, businesses, and foundations. Based in the greater Chicago area, he serves clients throughout Illinois, as well as Florida, Massachusetts, California, Indiana, and other states. To schedule a complimentary portfolio review, contact Chris today by calling 708.488.0115 or emailing him at lumencapital@hotmail.com.

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[1] http://www.cnbc.com/2017/03/02/etf-investing-grows-as-money-moves-into-stock-market.html

*Long ETFs related to the S&P 500 in client and personal accounts although positions can change at any time without notice or dissemination on any other form of electronic media.

Back Wednesday

Should You Invest in Marijuana

I've fielded numerous calls from folks about investing in the burgeoning "pot" industry.  If there is a speculative craze out there at the moment then it's in this sphere.  It seems simple.  Marijuana is legal in several states already and is likely to become legal in more in the next few years.  Indeed it's hard to argue that legalized weed hasn't made somebody, somewhere some money.  Colorado last year took in nearly $200 million in tax revenue on $1.3 billion in revenue.  Legal sales across the US grew nearly 30%.  The problem though is that while somebody is likely making money, it's probably not going to be you or me.   

The real money if it's investing in these businesses is doing so privately.  These are deals amongst accredited investors who can put big dollars into very speculative investments in the hopes of generating what is hoped to be outsized investment returns.  Folks that see these sort of deals are thought to be able to understand the nature of investing in such risky adventures and hopefully are rich enough to absorb any potential losses. Unless you are one of these sorts of persons, you're not likely to be approached with this kind of deal.  If you get to see one of these then ask to see some numbers behind the investment.  Be leery of anything offered to you that is short of information and long on hope.

Most everything out there trading on public markets trades as small over-the-counter {OTC} "penny" stocks.  Yes you can maybe scoop up shares of companies on the OTC bulletin boards trading in the pennies per share and have visions of riches before your eyes.  But there is a reason they trade here and at these levels.  Most of these are likely not real companies, or companies without meaningful sales and no prospects to ever have such.  Perhaps there are one or two hidden gems hiding in these weeds but you're going to have to be very fortunate to ferret them out.  Companies trading here have let professional investors in some form take a look at them and they've passed.  

Now I'm not saying you can't find that one diamond in the rough, but I'm telling you I don't know where to look and I'm not getting paid to do the looking for you.  Don't ask me for advice because I have none to give other than there is a very high probability of you losing money if you try to invest in this space.  Yes, there will be a few that hit the jackpot but the majority of investments by regular folks in the marijuana industry has a high probability of ending in losses and tears.  If you choose to go that route good luck to you, you're on your own and consider yourself warned!

Here are a few things I've found on the web you might want to read before you think about this space.  Most of  these articles appear in either Canadian or Australian online services.

The Sydney Morning Journal, "Medical Cannabis Stocks are all the Rage, But it's a Bubble".

The Calgary Sun, "Investors Dive into Marijuana Stocks Raising Concerns About-Green Bubble."

Nanalyze.com, "Warning Don't Buy Cannabis Stocks."  {The article refers to buying OTC cannabis companies.}

BNN.CA, "Marijuana Stock Euphoria: Should You Join the Wild Ride?"

I haven't posted the opposite side where everybody is overly optimistic and tells of money just to be scooped up.  You can find page after page of that stuff on the web with little or no effort.  Finding the opposite of the optimists takes some doing.  Another reason for caution in my book.

Back Monday.

Thoughts {04.05.17}

President Trump meets for the next couple of days with China's President Xi Jinping.  Besides economic discussions North Korea will likely be a center of much discussion.    North Korea has been in the news a lot lately.  Recently a high level defector has warned that North Korea would use nuclear weapons if the regime felt threatened with attack.  In that same manner North Korea has accelerated its weapons testing systems, firing another missile into the seas between it and Japan yesterday.  The US and North Korea seem to be headed towards some sort of show down on this.  I think Xi Jinping is going to be told this week that he needs to fix this problem or this US is going to consider all sorts of options that have been previously off the table.  Markets don't seem to be all that concerned about this but I think this is something for us to watch a bit more closely in the coming weeks.  President Trump is going to be tested at some point on the foreign policy front and the North Koreans seem like a pretty good candidate to be at the front of that line.

On a happier note you know that valuations on stocks are elevated right now.  One of the things that might help in that regard is that S&P earnings are expected to rise over 10% this quarter.  If that happens and we see similar rises going through the rest of 2017 then stocks PE multiple will be coming down.  It could also set the floor for a better market environment later in the year as investors become more confident that such results are sustainable.

Go read over at Bloomberg, "A Smarter Approach to Infrastructure."

Also on a happy note, the baseball season has started!  The focus here will be on the Cubs home opener next week when the players get their rings and the World Series Championship banner will be raised.  What we should perhaps first focus on in Chicago is that it is going to snow tonight.  Major bummer!

Back Friday.

*Long ETFs related to the S&P 500 in client and personal accounts although positions can change at any time without notice or dissemination on any other form of electronic media.

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Chart Watch {120 Years of the Dow Jones}

Titled, "Human Innovation Always Trumps Fear",  Market Watch recently posted a 120 year chart of the Dow Jones Industrial Average.  You should be able to double-click on the chart to make it larger.  If that doesn't work then following the link to the original site provides a way for you to see this in a larger format.  Here is the chart and below it is some of their commentary.

"Chris Kacher, managing director of MoKa Investors, this week published a graph of the Dow’s performance since 1896 that charts how the index’s peaks and troughs have reflected the U.S. economy’s triumphs and tribulations. But more than that, the graph also illustrates how the Dow has become a chronicler of investors’ responses to significant global events. 

At its simplest, the chart proves once again that over the long term, the stock market always rises because “intelligence, creativity, and innovation always trump fear,” according to Kacher. Yet at the same time, it also underscores the basic mantra that market participants need to stay nimble during times of uncertainty to maximize their returns. Investors must stay fluid to changing market conditions and not become wedded to their stocks, said the strategist. 

“There is no get-rich-quick scheme. There is no such thing as a black box where you press a button and let it run indefinitely. Investing is more challenging than brain surgery,” Kacher told MarketWatch. 

The Dow DJIA, -0.46% which began its career with 12 components, has risen more than 50,000% over its lifetime. During the same period, the U.S.’s nominal gross domestic product has boomed 118,583%, according to Measuring Worth, a website run by academics Lawrence Officer and Samuel Williamson.

But the Dow’s upside trajectory has always not been smooth. In between its bursts of energy that eventually took the blue-chip index to the 20,000 mark in 2017 were long periods of misery when the market remained in a downward spiral or moved sideways. 

As the chart shows, it took 25 years for the market to recover from the 1929 stock-market crash, and 16 years for stocks to bounce back from the combined effect of the Vietnam War, the 1973 oil shock and the resignation of President Richard Nixon."

*Certain clients of our firm currently hold legacy shares in ETFs related to the Dow Jones Industrial Average.  These positions can change at any time without any form of notice on this blog.

Back Wednesday.  

They're Playing Baseball Today!

It would be an understatement to say we've had a lot of great news over the past six months.  But winter's grip is loosening across the country and today they're playing baseball again.  Oh and the Cubs are World Champions.  Let's say that again.....The Cubs are World Champions!  There's even new life for those Cincinnati Reds!  Life is good!

"The one constant through all the years Ray has been baseball. America has rolled by like an army of steamrollers. It's been erased like a blackboard, rebuilt and erased again, but baseball has marked the time. This field, this game is a part of our past Ray. It reminds us of all once was good and could be again."-James Earl Jones as Terence Mann in "Field of Dreams."